Germany Pondering Stake in Airbus Parent

Published: October 23, 2006

The German government is weighing whether it could take a joint stake in EADS, the parent company of the aircraft maker Airbus, along with private investors and banks, the nation's finance minister said in comments released Sunday.

Speaking to the newspaper S?utsche Zeitung, Peer Steinbr? the finance minister, said German government participation in EADS could help stabilize the company and secure jobs.

''Nobody has the idea of suddenly making the government an entrepreneur,'' Mr. Steinbr?said. ''But we can't let Airbus just fall headlong because some mismanagement has left it in a difficult position.''

Airbus, which is based in France, has suffered costly setbacks to its A380 superjumbo project. Earlier this month, it said that the project would be delayed two years and that the holdup would erase 4.8 billion euros ($6 billion) from EADS profit over four years.

Louis Gallois became the fourth Airbus chief executive in 16 months when he took over from Christian Streiff on Oct. 9. Mr. Gallois has warned of painful job losses and pledged to stick to his predecessor's cost-cutting targets -- intended to generate 2 billion euros ($2.5 billion) in annual savings by 2010.

Germany fears major job losses at the Airbus plant in Hamburg. Already last week, Airbus said it would cut 1,000 temporary staff and reduce working hours at its German operations. It also announced plans to cut working hours to as little as 28 hours a week for some staff in Germany -- though without cutting their pay.